Energy service company Wood Group is close to tying up another expansionary move overseas, according to chief executive Allister Langlands.
The Aberdeen-based group has been working on potential deals for some time and could be in a position to sew up an acquisition or joint venture within a few months, he added.
Mr Langlands was speaking yesterday after Wood Group’s annual meeting in the Hilton Aberdeen Treetops hotel, where chairman Sir Ian Wood delivered an interim management statement saying trading this year was matching expectations.
Sir Ian said market conditions remained broadly in line with those outlined in the company’s 2009 results announcement on March 2, revealing annual profits dived 31% to £177million on turnover down by 6% at £3.3billion.
Wood Group’s chairman said production support-related activities were continuing to deliver a robust overall performance but volume in the group’s engineering division continued to be hit by project delays and was expected to produce lower revenue this year, compared with 2009, Sir Ian added.
He said the largest reduction was in downstream, process and industrial work, where the market was likely to remain soft throughout 2010.
By contrast, the firm anticipates a rise in the volume of work in its upstream business later in 2010 and into 2011. Sir Ian said: “Subsea and pipeline activities continue to enjoy good levels of business.”
Last August, Wood Group completed the acquisition of a controlling stake in Saudi Arabian engineering company Al Hejailan Consulting.
At yesterday’s meeting, Sir Ian told shareholders they could expect further progress on the company’s growth initiatives in Africa, Asia Pacific and the Middle East in the coming months.
He added: “Our financial position remains strong and we anticipate good operating cash flow for the year. We continue to pursue a number of bolt-on opportunities to expand our geographic footprint in key growth markets.”
Sir Ian said the group’s production-facility arm was seeing good activity across longer-term contracts in the North Sea, while the well-support division was continuing to develop international business and gas-turbine services had reasonable overall demand.
Sir Ian said: “Overall, we believe that our 2010 performance will be in line with expectations.”
More than 350 people are in Aberdeen at the seventh annual Devex conference and exhibition for geologists, geo/petrophysicists, engineers and production technologists.
Devex 2010 chairman Graham Davis said: “Devex has always been about sharing experience to maximise hydrocarbon recovery. There is a window of opportunity closing (in the North Sea) as shutdown of ageing infrastructure potentially strands both emerging new resources and existing residual oil reserves. Our industry makes investment decisions on three to five-year timescales so sharing experience today helps accelerate development opportunities tomorrow.”
The event at Aberdeen Exhibition and Conference Centre started yesterday and continues today.